NPCI Empowers UPI Users with ‘UPI Circle’ for Delegated Payments

In a significant move to enhance the accessibility and convenience of digital payments, the National Payments Corporation of India (NPCI) has introduced “UPI Circle.” This innovative feature within the Unified Payments Interface (UPI) ecosystem empowers users to delegate payment responsibilities to trusted secondary users. This initiative directly addresses a crucial gap in the digital payments landscape by offering a solution for individuals who, despite the convenience of UPI, still rely on cash due to limitations in managing their personal accounts.

Key Features of UPI Circle

• Delegation of Payment Responsibilities: UPI Circle allows primary users to authorize secondary users through their UPI apps, granting them either partial or full access to transactional activities. This flexibility enables users to tailor the level of access based on their specific needs and the level of trust they have in the secondary user.
• Full Delegation: Under full delegation, secondary users gain the ability to initiate and complete UPI transactions independently, but within preset spending limits defined by the primary user. This feature can be particularly useful for scenarios where the primary user may be temporarily unavailable or wishes to delegate routine payments.
• Partial Delegation: In contrast, partial delegation allows secondary users to initiate payment requests, but the final authorization rests with the primary user, who must approve each transaction using their UPI PIN. This provides an added layer of security and control for the primary user.

Guidelines for Secure Transactions

• Distinct User Journeys: To ensure a seamless and user-friendly experience, UPI apps and Payment Service Providers (PSPs) are required to offer separate user journeys for primary and secondary users. This allows each user to navigate the app and its features in a way that is tailored to their specific role and permissions.
• Mandatory Security Measures: Robust security is a cornerstone of UPI Circle. All secondary user transactions must be authenticated using either app passcodes or biometrics (fingerprint or facial recognition). This helps to safeguard against unauthorized access and fraudulent activity.
• Linking Secondary Users: Initially, the linking of secondary users is facilitated through QR code scanning or selection from the primary user’s contact list. Manual entry of mobile numbers is restricted as an additional security measure to prevent potential errors or misuse.
• Delegation Limits: To maintain control and manage risk, each primary user can delegate payment responsibilities to a maximum of five secondary users. Similarly, each secondary user can only accept delegation from one primary user at a time.
• Transaction Limits: To further enhance security and control, fully delegated accounts are subject to a maximum monthly limit of ₹15,000 and a per-transaction cap of ₹5,000. For partial delegations, the existing UPI transaction limits continue to apply.
• Cooling Period: Upon successful linking of a secondary user, a 24-hour cooling period is enforced. During this period, a daily transaction limit of ₹5,000 is imposed for both full and partial delegations. This serves as an additional safeguard to mitigate potential risks associated with new linkages.
• Transaction Visibility and Control: Primary users retain full visibility and control over all transactions conducted by secondary users. They can monitor transaction details through their UPI app and bank statements, ensuring transparency and accountability.
• Compliance and Dispute Resolution: UPI Circle operates within the regulatory framework established by the Reserve Bank of India (RBI). Compliance with RBI guidelines on Turn Around Time (TAT) and customer compensation for failed transactions is mandatory. Additionally, Online Dispute Resolution (ODR) facilities are integrated into the UPI ecosystem to enable swift and efficient resolution of any transaction-related issues.
• Reconciliation: The reconciliation processes for UPI Circle transactions align with existing UPI guidelines, incorporating specific purpose codes and settlement procedures to ensure clarity and accuracy in transaction handling.

The launch of UPI Circle represents a significant step forward in expanding the reach and usability of digital payments in India. By enabling users to delegate payment responsibilities to trusted individuals, NPCI is fostering financial inclusion and empowering users with greater control over their financial transactions. The emphasis on security, transparency, and compliance ensures that UPI Circle operates within a safe and regulated environment.